Bankruptcies Increase as Americans Seek Debt Relief
The bad news: more consumers are filing for bankruptcy. The good news? More consumers are filing for bankruptcy.
Personal bankruptcy rates were 41 percent higher this September than they were a year ago, according to the American Bankruptcy Institute. Now, a surge in bankruptcy filings certainly isn't something to jump up and down about because it indicates the economy isn't doing so hot. But we all knew that already. Yes, unemployment is approaching 10 percent. Millions of homeowners - some who have already had their home loans modified - are facing foreclosure. What's new?
So let's focus on the good news. More folks turning to bankruptcy means more folks getting the debt relief they so desperately need.
In the past, people have notoriously avoided bankruptcy at all costs - including the loss of their home - because of a myth that bankruptcy is a last-ditch effort that does as much bad as it does good by damaging credit and your good name. But if there's a silver lining to this recession, it's that people are starting to realize what a useful - and effective - tool bankruptcy can be.
Yes, your creditors will know you filed. And yes, your payment plan could take months to years, depending on whether you file for Chapter 7 or 13. But bankruptcy is not meant to a quick fix; it's meant to be a conclusive one. It can stop creditor actions like repossession and foreclosure while providing an affordable way to reduce debts. And that will free up more of your paycheck for your other obligations. Kind of like getting a raise, except you don't need your boss's permission.
If you're worried about how a bankruptcy filing will affect your finances, consider this. If you carry a balance on multiple credit cards, often approach or exceed your credit limit and sometimes pay the bills late or not at all, you probably don't have much credit to begin with. Would you rather be improving your finances with a bankruptcy mark on your credit file or continuing to add to your debt and drag down your credit score with no end in sight?
Bankruptcy won't tarnish your reputation - but losing your house, your credit and your financial independence will. Bankruptcy can prevent those things and put you on the track towards a brighter future. To learn more, simply sign up for a free one-on-one debt analysis with one of our Atlanta bankruptcy attorneys. We'll answer your questions and identify a plan that fits your individual situation. I'd say that's good news.